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A sum of Rs. 8,000 is deposited for 3 years at 5% per annum compound interest (compounded annually). The difference of interest for 3 years and 2 years will be

Correct Answer: Rs. 441

Explanation:

Given principal amount = Rs. 8000


Time = 3yrs


Rate = 5%


C.I for 3 yrs =  8000   x   105 100   x   105 100   x   105 100   -   8000 =   Rs .   1261


 


Now, C.I for 2 yrs =  8000   x   105 100   x   105 100 =   Rs .   820  


 


Hence, the required difference in C.I is 1261 - 820 = Rs. 441


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